Häfele plans to triple India sourcing for global sales in two years

German furniture fittings and interior solutions-maker Häfele plans to source 50% of its global sales from India within two years — nearly triple the current level of 18%, and a major leap from under 10% just last December.

The move marks a strategic shift for the €1.7-billion company, which is pushing to turn India from a high-growth market into a global supply hub, driven by cost, scale, and rising demand for localised, quality products.

“Our India supply base was under 10% just last December. In the first quarter, we crossed 18%. By the end of the year, we’ll reach one-third. And in two years, 50%,” says Frank Schloeder, Managing Director, Häfele South Asia. “That’s a massive transformation from where we started.”

The move coincides with Häfele’s broader push to manufacture in India, where it is setting up its own factory and ramping up sourcing partnerships. In May 2025, the company signed a Memorandum of Understanding (MoU) with the Department for Promotion of Industry and Internal Trade (DPIIT) to support India’s manufacturing and startup ecosystem.

As part of the MoU, Häfele will back product innovation, local sourcing, and entrepreneurship through targeted investments, supplier development, and integration into its global supply network. DPIIT, in turn, will enable startup connections and ecosystem access via Startup India.

“This is not just about moving production for cost. It’s about enabling MSMEs and building long-term supply resilience,” Schloeder says.

The company has already invested over $2.5 million in an Indian appliance startup and placed purchase orders with MSME suppliers of hardware and fittings. It is also working closely with local vendors, embedding its own quality teams on the ground and running detailed audits to ensure compliance with Häfele’s international benchmarks.

“This is not just about Make in India, it’s about building India for the world,” says Schloeder. “India is currently the third-largest market for Hafele globally in terms of revenue. This position was previously held by another key international market, which India has now surpassed owing to consistent year-on-year growth. Now we want to make India one of our largest sourcing bases globally.”

India currently contributes about ₹1,300 crore, or just under 10% of Häfele’s global revenue.

Why Häfele wants to build in India now

A 20-year head start helped. Häfele entered the country in the early 2000s, well before modular kitchens, built-in appliances, or premium home solutions became mainstream. 

“India doesn’t buy one-size-fits-all European products. You have to offer five-star design at three-star prices. We cracked that,” says Schloeder. “But the problem is, when you import from Europe, that five-star product becomes seven-star in price.”

For one, the brand sees India as a long-term growth engine. The domestic market is still largely unorganised, with modular kitchens having under 30% penetration. Yet, demand for premium fittings and appliances is rising steadily across urban and semi-urban pockets.

Second, India’s shift from a service economy to a manufacturing-led one offers cost advantages and skilled labour, though quality remains a pain point. “The missing link is a quality mindset. That’s what we’re solving now,” says Schloeder.

Häfele has begun setting up its own manufacturing plant in India — land acquisition is underway, with interim production expected to start this year. The company is investing “several hundred crores” over the next 3–5 years across its own factory, Indian startup investments, and supplier partnerships.

Despite the Make in India target, Häfele is clear that India will never account for its entire global sourcing. “We will never touch 100%,” says Schloeder. “And we shouldn’t. Because you need to offer the best solution, and sometimes that means importing from where the expertise exists.”

He estimates that local sourcing will likely stay under 80%, even in the long term. “We don’t want to compromise on quality. Some categories just don’t have the ecosystem here yet.”